Payment Protection

lady_fuschia

Just wondered if anyone had any thoughts:

When I took out a bank loan (Nationwide) just over a year ago, I took out a payment protection plan with it because I was clueless and the way they sold it to me was as if I had to have it. Since then I've heard all these horror stories about it in the press, about how I'm likely just throwing money down the drain.
I'm paying back as quickly as I can now, will be debt free by April 2008 if I stick to current plan, and according to the booklet will get a refund of "unused" payment protection.
But I was wondering:
a) can I decide I don't want payment protection any more and ask them to cut it out?
b) Is payment protection really that bad an idea or is it just a scary bandwagon the media have all jumped on?

I really wish I'd got a bit more financially savvy before I decided to start borrowing money!

F xx

bluezone

Some places will allow you to cancel your payment protection at any time in your loan.
I had 2 loans (1 with barclays, and 1 with barclaycard). For the barclays one I went in and had to create a new loan without protection and with the barclaycard 1 I just phoned up and they did it over the phone but instead of making the loan shorter I decided to take the money saved as 4/5 months payments so it gives me a like a payment holiday.
Just give them a call and see what they say - the worst they can do is say no.
I think most people wish they were a bit more financially savvy before taking out loans but then again if we were all a bit more savvy then we wouldn't be in debt in the first place

CLAPTON

you will need to ask nationwide whether you can cancel ....it maynot be possible or worthwhile. It is often difficult or virtually impossible to cancel for loans although usually easy for credit cards.

is it good or bad. ...two issues

if you feel you need it, getting it separately from the loan is usually much cheaper and allows you to tailor it to your specific concerns e.g. you may want critical illness cover but not unemployment cover.
linked to the loan it is usually rediculously expensive

why most people think it a waste of money is that
a. it often doesnot actually pay out because the small print excludes your particular circumstances....have you studied the small print?
b. there is often a waiting period before pay out ...say 2/3 months if you become unemployed....are you likely to become unemployed and find no work for 2/3 months?
c. remember it doesn't always actually pay the debt off, it merely pays the monthly payment for a defined period, after which you are still left with the debt.

Broken_hearted

I found payment protection virtualy useless when OH became ill. some paid out but most didn't, liverpool Victoria was the worst, after fighting they refunded the premium we paid but left us with the bill to pay. So now we have to pay back £6,000 at £10 a month, useless.

lady_fuschia

Hmm, this is certainly making me think!
Think first point of action is to get out all my paperwork again and study the small print!

wannabedebtfreebeth

I am off sick at present and the insurance is paying down my credit cards - without this I would not be managing at all at present. No-one ever expects to be ill for any length of time but when it happens it can be catastrophic without insurance.